Four Solutions to Manage Employee Referrals

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This post is a summary of GooodJob’s recent white paper, “Embrace a New Approach to Employee Referral Programs by Rewarding Efforts.” To read the entire white paper, click here.

It’s OK to say it – your employee referral program needs help. You know that referrals are a major source of best-in-class talent, yet you are having trouble scrounging up enough employee involvement to really have an impact. With only 10-20 percent of employees generally responsible for 80 percent of referrals, it’s no wonder that you are feeling let down by the program and wondering what is holding it back.

Not to worry – we have four proven solutions that can rehabilitate your program and restore it back to an excellent source of top candidates:

Problem 1: Employees as agencies

Many referral programs relate to employees as contingent recruiting agencies, in which just the employee whose referral is hired receives a bonus – and only following a months-long probation period at that. Theoretically, the dangling prospect of the bonus is supposed to sufficiently motivate employees to refer candidates.

Solution: Reposition employees as the focus, front and center

Remember that referral programs cannot exist without employees. Instead of hinging their success on a nearly unattainable bonus, send the message that all of their referral efforts are of value, and engage them more throughout the referral process.

Problem 2: Employees receive little acknowledgment

Relegated as mini-agencies who should be content with the mere possibility of a bonus, employees are not given the credit and appreciation they deserve. By making referrals, they are acting outside of their job descriptions with little acknowledgment.

Solution: Recognize all of employees’ referral activities

To truly motivate employees, organizations need to recognize their referral activities and provide feedback immediately. Failure to acknowledge their participation throughout the referral and hiring process does nothing to reinforce their behavior and encourage reoccurring performances.

Problem 3: Delayed bonus…or none at all

Many referral programs enforce a probation period for newly hired referrals before they reward employees with the bonus. If any hired referrals leave during this time, the employees do not receive a bonus – odd, because employees have no direct influence in the final hiring decision.

Solution: Reward employees for their efforts

Reward employees for the stages their referrals reach – not only if their referrals are hired and pass the probation period. Use gamification tools to incentivize and reward employees’ efforts – better meet their expectations and foster long-term engagement.

Problem 4: Employees are not updated

Throughout the entire hiring and probation process (which can be up to six months!), employees are typically kept in the dark about their referrals’ statuses. Unless they approach the candidate or the HR department themselves, they are given no indication as to how far along their referrals are.

Solution: Keep employees informed

Keep employees in the loop about their referrals’ statuses. Such acknowledgment helps employees feel more involved and included, and sends the message that their referrals really are vital. Additionally, constant recognition and compensation increase company morale.

Referrals Remission

By turning the referral program into a game, it becomes a fun, popular and rewarding (literally!) activity–and solutions like GooodJob can help you get started. Instead of waiting until the end of the hiring process to give a bonus to the single employee whose referral was hired, 10-20 employees will be recognized for their efforts throughout the process. Employees will be much more engaged and updated, and their participation will spur continuous involvement among the greater workforce. No longer faced with the challenges of low employee activity, referral programs will, by virtue of their incentivization characteristics, finally enable companies to fully benefit from their potential.

Assaf is the founder and CEO of GooodJob. Previously the CEO of two publicly traded companies, Assaf holds a law degree from the University of Leicester in England, and an MBA from the College of Management in Israel. During his ...